Aviva Investors has scrapped its flagship commitment to divest from companies failing to curb carbon emissions, in a move that aligns with a broader trend of asset managers scaling back green commitments.
The London-based investment firm, which manages £238 billion in assets, had announced in 2021 that it was placing 30 of the largest utilities, mining, and oil and gas companies on a “watch list” as part of an engagement strategy. At the time, it pledged to fully divest from businesses that failed to align with its climate expectations, including targets consistent with limiting global warming to 1.5°C above pre-industrial levels—a key goal of the 2015 Paris Agreement.
Under the original plan, companies unable to demonstrate sufficient progress towards emissions reductions would face divestment within three years. The pledge was regarded as one of the most ambitious in the asset management sector, aimed at holding high-emission businesses accountable for their environmental impact.
However, four years later, Aviva Investors—a subsidiary of the insurance giant Aviva—has confirmed it has restructured its approach. Speaking to a media platform the firm said it would now focus on engaging with a “broader set of critical sectors,” including aviation, transportation, building materials, and industrials.
The shift comes amid market upheaval driven by Russia’s invasion of Ukraine, which has fuelled a surge in share prices for carbon-intensive companies. Additionally, asset managers have faced growing political and regulatory pushback against environmental, social, and governance (ESG) investment criteria.
Aviva Investors insisted its commitment to climate science remained “unequivocal” and that it still recognised the long-term material risks global warming posed to investment performance. However, it acknowledged that the economic and regulatory landscape had changed significantly since 2021.
“A very different macro backdrop has emerged,” the firm stated, citing heightened concerns over energy security and economic recovery, which have influenced national decarbonisation plans and regulatory priorities.
It remains unclear whether Aviva Investors has fully divested from any of the companies originally placed on its watch list. The firm confirmed that in cases where it was dissatisfied with a company’s progress on the energy transition, it had chosen to “reallocate capital” towards businesses that it believes are more committed to the green transition.
At the start of the decade, major asset managers were vocal about the financial risks posed by climate change. BlackRock chief executive Larry Fink famously declared in 2020 that “climate risk is investment risk.”
However, in recent years, many investment firms have retreated from climate-focused initiatives, withdrawing from coalitions pushing for corporate climate action, scaling back support for environmental resolutions at shareholder meetings, and reducing sustainability-focused staffing.
Robert Noyes, coordinator of the campaign group UK Divest, condemned Aviva’s decision as “sorely disappointing” and accused the firm of backtracking on its promises.
“Aviva is very close to losing its crown as a supposed leader in the climate space by not following through on its commitment to drop companies that shun the energy transition,” Noyes said, warning that the firm appeared to be bending to political pressures.
In 2022, Aviva Investors ranked among the top 10 asset managers in a ShareAction report assessing votes on climate and social issues at shareholder meetings. By this year, it had slipped to 30th place.
Noyes urged asset owners to hold Aviva to account. “Asset managers have massive potential to steer the economy away from expensive, risky, and volatile fossil fuels towards cleaner, more affordable energy sources,” he said. “Clients must demand that Aviva follows through on supporting this transition.”
